A state audit released on Tuesday found that Colorado state regulators charged with managing the state’s medical marijuana industry failed to meet expectations on everything from tracking inventory and managing their budget to keeping criminals out of the business.
The findings were not only a blow to the Colorado Medical Marijuana Enforcement Division, but caused a delay in the committee releasing a draft of the state’s recreational marijuana legalization laws, as committee members were scheduled to vote on Thursday on whether or not they should transition all pot enterprises in the state to the control to the division.
But the audit’s findings rehashed doubt about a recreational legalization program for some.
“It’s tough for me to vote to give them one ounce more of regulatory responsibility,” Rep. Brian DelGrosso, R-Loveland, said at what was supposed to be the final legislative committee meeting on Thursday. “If they couldn’t handle the little piece they have now,” he said later, “there’s no way we can trust them to handle more.”
It was DelGrosso’s comments that prompted committee chair Rep. Dan Pabon (D-Denver) to call a recess and have committee members gather in an adjacent room in order to vent their frustrations.
Before the release of the audit, lawmakers had planned in the last four months that any recreational pot regulation in the state would look similar to and be regulated like the medical marijuana program. But after finding the agency had failed to meet expectations, how the state would regulate marijuana seemed to be up in the air.
“They need to tell us how they will do things differently,” Sen. Cheri Jahn, D-Wheat Ridge, said of marijuana regulators.
Lawmakers strong resistance to trust the Medical Marijuana Enforcement Division to takeover recreational regulation led to Pabon’s decision to invite the state’s Director of the Department of Revenue, Barbara Brohl, who oversees the regulators, to address the committee.
Brohl said that many of the issues in the audit occurred before she was in her current position and assured lawmakers that many of the issues had been fixed now.
“We agree there are some lessons learned with the implementation of medical marijuana enforcement,” Brohl said. “We understand there are some concerns, but we can’t move forward unless we have a baseline. We have a baseline now.”
Part of the budget problems stemmed from the enforcement division’s overestimate of how much revenue it would collect from business applications.
“We have control over this division at this point and will continue to have control,” she said.
Though Brohl calmed some lawmakers, the committee set a meeting for April 4 so Brohl could further explain the audit’s results and how the regulators had improved their operations. The committee also chose to postpone other votes on the issue of recreational marijuana until its questions could be answered.
Michael Elliott, executive director of the Medical Marijuana Industry Group, said the state’s regulation works but needs funding. Although the state might lack oversight, he said, “the vast majority of business owners are staying in strict compliance with state law.”
If the committee chooses to not allow the medical-marijuana regulators to take over, Pabon said there are a few other options, including allowing the Department of Revenue to enforce regulations.
Creating a new division for recreational marijuana “doesn’t seem likely,” Pabon said after the meeting. “But I think we need to hear from the department on how they’re going to move forward and solve these issues.”
The committee did vote on other recreational marijuana rules, though, and approved one proposal that only Colorado residents be allowed to own pot shops and adopted several others that set up educational programs and safety standards for marijuana.
Pabon also announced that the committee, which had planned to finish its work by the end of March, will now have until April 8 to finalize its ideas. An April 8 deadline would give the full state legislature exactly one month to pass the bill before the end of the session.